Please ensure Javascript is enabled for purposes of website accessibility

Facebook Inc.'s New Like Button -- a Big Catalyst

By Daniel Sparks - Feb 26, 2016 at 11:05AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here's why investors should be happy about the social network's overhauled Like button.

Initial tests in Spain and Ireland apparently went well; Facebook's (META 7.19%) overhauled like button is now moving from beta testing to a global rollout. Here's what the new like button looks like and why it is important.

Introducing Reactions
If you haven't already noticed it in your News Feed, here's a rundown on the new button. The upgraded Like button, called Reactions, is more of an extension of the Like button we all know than it is a replacement. Facebook users can now choose between five different emojis, or select the traditional thumbs up. Options for Facebook users to select when engaging with a post now include Like, Love, Haha, Wow, Sad, or Angry.

Reactions. Image source: Facebook.

The Like button is still displayed prominently by default. By simply clicking on the Like button, users can engage with a post using the traditional thumbs up. But users can hold down the Like button on mobile or hover over it on the web to view and choose from the five new emojis.

"Today, we're excited to offer it to everyone who uses Facebook around the world," Facebook said in a statement on Wednesday. "We will continue learning and listening to feedback to make sure we have a set of reactions that will be useful for everyone. We hope you enjoy the new Reactions!"

Why it matters
The new button is important for two key reasons.

First, the rollout of Reactions puts Facebook right smack in the middle of an undeniable emoji craze. And, from the looks of it, this craze looks like its here to stay. Consider some of these findings from a recent poll by textPlus -- a messaging service that supports use of emojis -- which surveyed some of its users.

Almost 100% of users between ages 13 and 24 are using emojis regularly.

A third of users said they would text less if emojis couldn't be used.

Nearly half of respondents said they would send an emoji to a co-worker or boss.

Second, Reactions will give Facebook more detailed data on its users. This will serve two primary purposes: It will improve the relevance of posts for users and Facebook will eventually be able to offer better targeted ad products to advertisers.

Any data gained from the new like button initially, however, probably won't be game-changing. Facebook said on Wednesday it will first treat all types of Reactions the same when collecting data on users. But this will change soon.

In the beginning, it won't matter if someone likes, "wows" or "sads" a post -- we will initially use any Reaction similar to a Like to infer that you want to see more of that type of content. Over time we hope to learn how the different Reactions should be weighted differently by News Feed to do a better job of showing everyone the stories they most want to see.

Look for updates from Facebook throughout the year on how Reactions is impacting the business. Given that the Like button is the primary way users engage with the social network, the overhauled button will likely have a meaningful impact. And in light of the growing use of emojis and the more detailed data the new Like button will give Facebook, the impact on the company will likely be very positive.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$170.16 (7.19%) $11.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
321%
 
S&P 500 Returns
111%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.